Quantifying Social Costs and Benefits to Guide Individual Action

Cityfi
Cityfi
Oct 29, 2018 · 3 min read

We as individuals face countless decisions every day that have an impact on the people and environment around us. In cities especially, where we live close to one another and the pace of civic innovation is high, this presents us with an opportunity to make a difference in the world’s biggest problems, from climate change to poverty and inequality.

Yet when we think about these issues, we tend to become overwhelmed by the sheer size and complexity of the challenges we have to overcome. Indeed, the Yerkes-Dodson law posits that when the magnitude of problems is scaled upward in the interest of mobilizing action, the quality of thought and action declines, because processes such as frustration, arousal, and helplessness are activated.

If everything is very important, then nothing is important. Brian Mulroney

At Cityfi, we are fixated on quick, opportunistic forward movement to establish “small wins,” rather than indecision- induced inaction. We must take the big problems and break them down into tangible first steps in order to catalyze larger change. Assigning value to these steps can help to prioritize and frame the conversation.

Inspiring Change

To illustrate, consider an urban dweller’s choice about their daily commute. Let’s call her Sally. Sally knows that greenhouse gas emissions cause climate change and that we are headed for environmental catastrophe. But what impact would she really have by changing her mode of transportation? And which mode of transportation is best to switch to?

To get to an answer Sally can integrate into her understanding of the world, we first need to identify the social impacts of mode-switching such as accidents, emissions, and roadway maintenance. Problem definition is at least half the battle! We then need to assign monetary values for these impacts, for which there are copious creative methods. Finally, we can calculate and visualize the net cost or savings to society per mode of transportation.

Here is an example using a methodology from the Victoria Transit Policy Institute that shows social cost savings for different mode options per mile.

Seeing something like this, perhaps Sally is inspired to carpool or telework once a week. Let’s say she has a 30 mile round trip commute. That’s $900 to society this year through that single change. Small win! Plus, she can get others to mode-shift in the course of finding carpool buddies, and together they may even shape public infrastructure investments like sidewalk repairs or bike lanes, further incentivizing people to shift to greener transportation. So maybe it’s more like $1500.

Asking Questions

Crucially, we should not take models or estimates at face value. Even when based on objective data, the factors that models include and assumptions they rely upon come down to subjective choices. Plus, they can never take all the effects of a decision into account. We should be bold about asking questions.

For example, what about the impacts ridesharing or teleworking have on social connectivity, well-being, or productivity? What about ripple or network effects of purchasing an electric vehicle? Might we be underestimating the economic risks of climate change? Or overestimating the value of a statistical life?

Yet we also should not dismiss quantification. Rather, we should debate our models, refine them, stretch them, and come up with creative ways to communicate with people at the point of decision-making. We look forward to contributing to the conversation in the coming months.

Cityfi

We’re in the business of urban change management.

Cityfi

Written by

Cityfi

Cityfi advises cities, corporations, foundations and start-ups to help catalyze change in a global, complex urban landscape. Twitter: @teamcityfi

Cityfi

Cityfi

We’re in the business of urban change management.